State of the Union addresses economy, trade, minimum wage

Obama proposes minimum wage boost to $9

The sequester is ‘‘a really bad idea,’’ and it would be ‘‘even worse’’ if he accepted Republican proposals to prevent the defense cuts by cutting deeper into education, job training and entitlement programs.

‘‘We can’t ask senior citizens and working families to shoulder the entire burden of deficit reduction while asking nothing more from the wealthiest and most powerful,’’ Obama said. ‘‘How is that fair? How does that promote growth?’’

Obama proposed the creation of an Energy Security Trust funded by oil and gas revenue to fund research to shift cars and trucks away from oil use to alternate energy sources.

On the minimum wage, Obama invoked his general election rival Mitt Romney, ‘‘Here’s an idea Governor Romney and I actually agreed on last year: Let’s tie the minimum wage to the cost of living so that it finally becomes a wage you can live on.”

Such an increase, affecting an estimated 15 million people, would require approval by Congress. Republican lawmakers have repeatedly criticized such proposals, saying a higher minimum wage would throw lower-paid employees out of work because of the cost to businesses.

Unemployment Rate

While the U.S. pulled out of its worst economic downturn since the Great Depression after Obama took office, unemployment has remained high and the ranks of jobless workers has cut employees leverage to gain wage increases.

Real median household income declined to $51,088 in December 2012 from $55,012 when he took office in January 2009, according to an analysis of census data by Sentier Research, an economic-consulting firm in Annapolis, Maryland.

Real average weekly earnings showed no gain for the year ended in December, and the unemployment rate in January rose to 7.9 percent from 7.8 percent the month before.

A report showing the economy unexpectedly shrank by 0.1 percent during the final three months of last year raised fresh concerns about the strength of the U.S. recovery. The administration did not specify the cost of Obama’s plan to provide preschool for every 4-year-old child. The president is proposing a state-federal partnership, with the U.S. government offering competitive grants.

Manufacturing Initiative

He said he’ll use his executive authority to start three manufacturing innovation institutes this year, while calling on Congress to act on a broader $1 billion proposal for 15 such institutes. The institutes are to be paid for through a mix of existing dollars in agency budgets and private sector commitments, partnering with universities and community colleges to train workers.

Manufacturing helped lead the recovery since the recession ended in June 2009. Capital expenditures and exports have contributed close to 75 percent of all gross domestic product growth since then.

The sector has essentially flat-lined since the end of the first quarter of 2012. The 500,000 new jobs added in the last two years isn’t enough to replace the 1.8 million manufacturing jobs lost since 2007.

Obama cited Apple’s plans to spend more than $100 million this year on building Mac computers in the U.S. Chief Executive Officer Tim Cook was among the guests invited to sit in first lady Michelle Obama’s viewing box for the president’s speech.

Other companies that have said they’ll shift production back to the U.S. from overseas include Caterpillar Inc. and General Electric Co.